Friday, December 31, 2010

Why you should apply for Excess Rights:Instant Jackpot Profits!

A lot of people are unfamiliar with Rights Issues for the company they invest in. This is because it is seldom discussed.

What is Rights Issue

Rights Issues is a method for the company to get additional funding for business.

The business is essentially make up of Assets = Debt + Equity.

There are 2 ways a listed company can seek large funding. One is by issuing more debts, the other is more equity.

Rights issue is to issue more equity.

A company will typically declare a 2 for 1 rights issue or another ratio meaning for how many existing shares you can apply for another number. In the case of recent First REITs rights issue, it is 5 shares for 4.

What is Excess Rights

Not all existing share holders can apply for rights issues.

  1. Foreigners typically have restrictions of not able to.
  2. Some existing share holders are not willing or do not have enough capital to do that.

You can apply for these excess rights

As long as you become share holders you can apply for these rights and excess rights.

Applying for rights provides no kicker. It is just to prevent dilution of your existing shares.

The kicker is the excess rights. It is basically like IPO jackpot. These rights is normally at a huge discount from current traded price.

In the case of first reit it is trading at eventual 70 cents but your cost of acquiring these rights is at 50 cents.

Take a look at this example here to understand why getting 2000 excess rights can mean a small win: First REIT Excess Rights Results: I got 2750 excess rights!

Sunday, December 19, 2010

Look to Emerging Markets for higher yield dividend investing

I talked a fair bit about investing in US Stocks, specifically Dividend Aristocrats, Champions and Achievers.

Now these are made up of really great dividend companies and highly stable ones, but to other investors a yield of 3% BEFORE withholding taxes cannot be called high yield investing.

If you would like to move out of a certain proximity bias and touched emerging market stocks, there are many value buys presenting 4%-10% dividend yield yet enables you to invest in a country stalwart with a wide economic moat.

Saturday, December 04, 2010

test post


Don’t be scare by insurance agents scare tactics

One of the tricks that insurance agents will do to make you tilt to the point that you need to buy that policy from them is to relate a story to you:
Insurance agents tell the consumers that the cost of a liver transplant is $100,000 and that it would be covered under a private shield plan.
Conman & conwoman like to tell the story of Andrea De Cruz's $250K liver transplant in Raffles Hospital. They have a thick folder of such newspaper stories to frighten the ignorant to do their bidding i.e. buy expensive private shield plans with all the riders, and buy expensive wholelife to "cover the critical illness".
Please filter this carefully. Remember that insurance is a bet against the unforseen and you are paying for it. Always research up what is the probability of such a risk happening.
In the end the cost of paying for that probability is your insurance cost. You want to pay for something that probability should be pretty high.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It  contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly  here.

Should Starhub,M1 and Singtel fear apps like Whatsapp, Pingchat, Skype and Viber

Today we saw the news of this new VOIP service called Viber going viral. Viber is a voip application like Whatsapp on the iPhone that provides good quality voice and the ease of finding your friends who have viber as well without additional means.

All in all it was great, as is Skype. It makes you wonder why you would want to pay for voice plans for 20 dollars. have a great coverage and more thoughts @ iPhone App Viber will killl telcos sooner rather than later.

Do you think VOIP is in the near future?

Wednesday, December 01, 2010

Envelope Budgeting with Quicken

After tracking my budget from 2003 to 2010, i think i sort of figure out that envelope budgeting is the best way to control and plan my spending. have a really detail explanation of what is envelope budgeting and a lifecycle of how you can go about implementing it with Quicken.

I do recommend using Quicken to track your budget as it has many value added features over Excel.

[How to budget with envelope budgeting to save money easily]

Friday, November 26, 2010

Daiso things are cheap? Are they worth it?

If you are a fan of thrift shops like Daiso like me, it is a god send to have something like this in your country or town.

Everything sells for 2 dollar but is it really cheap? Investment Moats have a good review on that

What is the competitive advantage of Daiso?

Thursday, November 25, 2010

How to access your home computer for trading on your iPhone and Android Phone

Folks who want to trade using your trading setup at home would want a solution like this:

  1. Setup a trading environment on your PC at home, with all your Charting and research reports ready
  2. Access it via your smartphone at work to execute

With TeamViewer, you will be able to do that.

And it is Free!

Find out in these 2 articles how to carry it out.

Tuesday, November 23, 2010

The myth about REITs and business trusts being good investments for you

REITs, Shipping Trusts are some of the good types of investments that you should add to your portfolio. Or is it? Many do not know that ultimately the owners that sells the properties to the REITs are the overall winners and investors are only taking much of the burdens.

Generally, no business trust will pay down its debts, because it is not in the interest of the trust manager to do so. The trust manager is paid as a percentage of assets, not equity. Therefore, the incentive is to borrow as much money as possible to raise the assets under management, thus raising fees, and never pay down the debt except under duress from banks.

An investor in a business trust has to understand that the trust structure is basically a packaging gimmick. It is given tax incentives by the authorities to encourage a more “sophisticated” capital market. Essentially, the original owner of the assets can enjoy tax savings if he owns the assets through a trust instead of within a normal corporate structure. With an IPO his ownership decreases, but he then enjoys the management fees. As a result he gains several advantages:

1. The management fees are economically an inflation-indexed annuity;
2. Partial asset divestment through the IPO raises cash for other higher-return projects;
3. Reduced ownership reduces the amount needed to fund a future rights issue; and
4. Trust distributions are taxed at a reduced rate (normally 10%)

Net-net, the overall income decreases slightly as the reduced share of trust income is partly offset by the management fees, but the potential liability decreases greatly. It is a huge risk-reward improvement.

Investors should not harbour any delusions that REITs are created primarily for their benefit. REITs are created first and foremost to help owners dispose of unwanted assets.

[Read the rest of this entry here >>]

Wednesday, November 17, 2010

For Starhub, M1 and Singtel investors, Morgan Stanley’s Internet Strategy update

If you invest in the 3 telcos in Singapore for growth or dividends, or for the matter telcos as a whole, you should read this powerpoint slides.
It gives you direction where the technology and telecom world could be headed
Internet Trends Presentation

Important Dates for First REIT rights issue

Some of you have asked for what are the important dates for rights issue. Here it is

  • XR to register for rights issue : 3 Dec 2010
  • Commencement of “nil-paid” rights trading period: 8 Dec 2010
  • Close of “nil-paid” rights trading period: 16 Dec 2010
  • Close of rights issue: 22 Dec 2010
  • Expected date of issue of rights units: 30 Dec 2010
  • Completion of the MRCCC Acquisition and the SHLC acquisition: 31 Dec 2010
  • Commencement of trading of rights units: 31 Dec 2010

Full coverage can be found here

Information on Indonesia Healthcare industry and First REIT healthcare REIT

If you want to invest in a healthcare REIT, you wanna know a lot of the demographics and future trends for that area of investment.

First REIT, a Singapore REIT recently did a rights issue to buy 2 indonesian hospitals.

But what astounds investors is that the information provided in the circular is comprehensive enough for you to learn more about Indonesia Healthcare industry.

Investment have full coverage on this rights issue and if you want to read the circular online you can read it at

Why you should read First REIT’s rights offer circular if you are interested in Healthcare REITs
This article was original posted in Investment Moats. You can read the article here @ Investment Moats. Investment Moats discusses dividend investing, income strategies and high yield investing.

Thursday, November 04, 2010

China Mobile is the potential high yield dividend stock for your portfolio $chl

I written extensively about dividend stocks, but seldom about ADRs. since China ADRs will be listed on the SGX, i took some effort to carry out a research on China Mobile to see if it has the potential to be a great dividend stock.

[Read China Mobile a potential international dividend aristocrat? $CHL $VOD >>]

Monday, November 01, 2010

Thursday, October 28, 2010

Is Google a monopoly?

When we look for investments we look for businesses that are monopolistic. This is because they are able to earn more and stops competitors from competing.  As a shareholder, it means the company is able to grow cashflow with ease.
Monopolistic companies either due to
  1. business economics
  2. regulation
Is desired but can change with time.
Here is a good illustration on some of our past anti-trust cases and one potential future one: Google.
Personally, I think google have an advantage. But really technology is a space that even if you are the biggest, your economic moat or monopolistic advantage can shrink just as easily. I don’t think they are a monopoly.

This article was original posted in Investment Moats. You can read the article here @ Investment Moats. Investment Moats discusses dividend investing, income strategies and high yield investing.

K-Green Trust's yield may not be as high as you think

I written an article over at Investment Moats indicating my purchase of K-Green Trust. From the looks of it, it doesn't look very appealing.

From this table we approximate based on 2011 dividends per share. On current yield its 6.98%. That looks good.
However, the yields over the concession years looks like those of SGS bonds.
The yield on Senoko is 2.883% and the yield on NEWater looks close to 0.971%!
If we factor in an inflation growth of 3%, the yield goes up to 3.4%, 2.57% and 1.21%.
Even then, a total return after god know, 25 years its 24% or 65% looks really medicore.
Now this is on top of the NAV going down to zero. All in all this is starting to look like a very bad proposition.
I am gonna seriously evaluate my investments. I have sent some enquiries to K-Green. lets see how responsive their investor relations is.

This article was original posted in Investment Moats. You can read the article here @ Investment Moats